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Goodwill must answer questions and rebuild trust: Editorial

Goodwill Industries of Toronto shuttered its charitable operations on Sunday. A lot of questions must be answered before anyone considers a financial rescue.

Keiko Nakamura, head of Toronto’s Goodwill Industries, has left several unanswered questions in wake of abrupt closing Sunday.

Tues., Jan. 19, 2016

The head of Toronto’s Goodwill Industries has a lot to answer for.

After all, Keiko Nakamura shuttered the charity’s stores, donation centres and offices on Sunday without warning, throwing more than 430 employees out of work and putting a $29-million social enterprise on ice after 80 years in business.

The question is: why did this venerable charity collapse so suddenly? So far Nakamura has not provided clear answers despite the fact her operation runs on the good will and donations of both the public and the government of Ontario.

Understandably, the union representing Goodwill workers is calling on the provincial government and community groups to provide funding to reopen the stores and donation centres.

There’s no question Goodwill is an institution worthy of support. It collects donated clothing and other items and runs training programs for people with disabilities and other employment challenges.

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But financial support should be extended only if there is openness about the reasons for the shutdown, a viable plan to turn things around, and reason to trust in the leadership. Sadly, none of those have been evident over the past few days.

First, Goodwill’s board of directors has abdicated its leadership role. After giving Nakamura the go-ahead for her plan, the entire group resigned on Friday.

The former chair, Michael Eubanks, insisted in a statement on Monday that they “stand behind her” and have encouraged her to carry on in her $206,000-a-year job. Yet they all quit for reasons they have not spelled out. That’s hardly a confidence builder.

Nor is the fact that Goodwill was told by auditors in May 2013 of “material uncertainty that may cast significant doubt about the organization’s ability to continue as a going concern.” Despite that, it doesn’t seem to have warned its union of this fact, never mind its staff.

Nakamura, meanwhile, isn’t inspiring confidence in any plans she may have to reopen. In a brief statement on Monday, she said only that there are “a number of components that need further certainty before I can provide further details.”

In other words, she offered no indication of a path forward that might put Goodwill on a sustainable path for the future. It beggars belief that this crisis emerged only in the past few days or even weeks. Surely the board and managers should have seen it coming, and for the sake of employees’ future and public confidence in the institution should have offered some hope for recovery – if it’s possible.

If Nakamura’s words didn’t provide reassurance, neither do the numbers.

While Goodwill earned $28.1 million — including more than $4 million from the province – in 2014, it spent more than $29 million. And things had been on the downturn for a while. In 2011, the year Nakamura took over after being ousted by the Ford administration from her job as head of Toronto Community Housing in the wake of a spending scandal, the charity took in $34 million.

So here are some of the questions that must be answered before anyone considers putting in more money to help Goodwill reopen:

With no board of directors, to whom is Nakamura answering?

Why weren’t other options taken before the charity was shuttered entirely due to a “cash flow crisis”?

What are the plans to turn the situation around?

Regardless of the answers, the province has an interest in finding out whether the money it invested in Goodwill Industries was properly used, and how the important training work it carried out can be continued.

It should appoint an investigator to get to the bottom of this mess and help the public understand how such a valued institution could collapse overnight.

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